Japfa left struggling after Q3 earnings plunged 49% to $15.5m

It has declined 12.5% from its IPO price.

After its stellar SGX debut in August, international agri-food company Japfa Ltd’s share price has cracked after reporting extremely disappointing results for the third quarter.

Japfa’s core earnings came in at $15.5m (US$12m) in Q3, down 3% year-on-year and 49% quarter-on-quarter. The decline was brought about by the 90% plunge in Japfa Comfeed Indonesia’s core earnings for the third quarter.

Comfeed contributed 55% of the Group’s profits last year. Its other subsidiaries CPIN and Malindo also reported poor results.

Last week, investors made their discontent known and Japfa’s share price suffered a 12.5% decline from its IPO price.

According to DBS, there’s no turnaround in sight for Japfa as 4Q14 earnings are expected to remain in the doldrums.

“We understand DOC/broiler prices remained weak in Oct14 and Nov14, made worse by seasonally low demand in Java. A potential hike in subsidized fuel prices this month could worsen the situation. The group has taken steps to reduce DOC production and halt capacity expansion until conditions improve,” noted DBS.

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